Tick Talk

Money swaps are fascinating things. Yet sometimes I wonder how we send billions of dollars around the globe so quickly. Fedex and UPS have global overnight capabilities (as does the Army), but with so much at stake, I’ll bet the Central Banks turn to an operation that for centuries has delivered valuable packages globally and gained the goodwill of nearly every nation - Santa Claus. 

Honestly, it’s like magic. Money flies from nation to nation at the speed of light (ACH, Bank Wire, Western Union [see Reg. E]). In regulation E, the “E” is for electronic. This electronic transfer does not convey anything tangible. It is merely a message of transfer (like texting) of a fiat currency.  You may have seen currencies around, they are multi-colored papers minted (special word for printed) by a government to conveniently fit into your back pocket. They are not backed by gold, silver, debt, or equity. Right, they don’t represent anything of value, they just have bad art and a bunch of numbers on them. But here’s the kicker - if you try to pay your taxes with anything other than your national fiat currency, it won’t be accepted.

With that in mind, the $700B from the Federal Reserve to bail out banks (or $277B to foreign nations) is only accepted by those concerns because they know that the U.S. government, by power of taxation, will force value into those papers on the backs of the masses. Yep, the full faith and value of the national currency is lashed inextricably to the citizenry.   

Here is why I bring this up. I think the economy is going to completely tank in the next 10 years. As it does, by virtue of unemployment, diminished house prices, corporate outmigration, etc., our collective tax-ability will falter. All of the billions of text messages the central banks sent to foreign banks and were backed by the new digital standard (just made that up) will, like an epiphany or panic, be valued according to what they really are (and always were), which is short electrical pulses. 

Relax, this won’t happen until all paper and coin currency is confiscated by a Presidential Executive Order, like the gold confiscation order of 1933.   Once all cash is confiscated (and citizen accounts credited), our country can finally rid itself of the menacing responsibility of accounting for a tangible currency and move in to the liberating and perfectly secret realm of computer cloud banking. The procedure will be sold as a public safety measure (no more bank robbers), but will effectively eliminate the possibility of a “rush on banks,” a phenomenon we will likely see in 2-3 months (or sooner). It will also entirely cut the cost of minting.